Measuring Quality of Life in Latin America: Some Insights from Happiness Economics and the Latinobarometro

Abstract

This paper addresses the challenges and contributions that come from taking a broader quality-of-life based approach rather than a simpler income-based approach to assessing welfare. It uses the tools provided by the economics of happiness and relies on large-scale surveys as well as more in-depth field research in Latin America. It shows how a quality-of-life approach can help us understand the welfare effects of a number of factors ranging from health, education, and employment status to institutional arrangements such as inequality and opportunity. It also sounds a note of caution about directly inferring policy implications from the results due to – among other factors – norms and expectations based on differences in the way individuals answer surveys (the “happy peasant” versus “frustrated achiever” problem) and due to lack of clarity in the definition of happiness. The latter allows for research comparisons across individuals and cultures, but presents challenges when making policy choices based on the concept.